French lamb prices in decline
Lamb prices in France have dropped during the month of June and may continue their downward trajectory. Even if prices are higher than a year ago, the average of €7.11 looks a little bit scary for the British producers who are afraid that export figures may drop in the following months due to a lack of competitiveness in the international market. "Since May, the gap between French and GB prices had been widening, a result of GB prices continuing to hold their strength while French prices dropped back. However, the gap between the two series has narrowed in the last week due to the sharp fall in GB deadweight prices. This comes as domestic supplies have started to increase which has seen market prices weaken. In the latest week, the difference between the two series stood at 26p.
How our prices perform against those on the continent is of particular relevance at this time of year, because this is when we typically move to a net exporting position. If GB prices remain at a premium to those in France, our exports will be less competitive and could see export demand drop back. This was seen in April, with lower UK lamb exports resulting from higher domestic prices and reduced foodservice demand," commented Bronwyn Magee, AHDB Trainee Analyst.
French sheepmeat production increased year-on-year in the first few months of 2021, up 8% (2,000 tonnes) in the year to April. This was driven by a large increase in production seen in March, with higher throughputs driving this increase. For April, production fell a significant 16% year-on-year.
Indoor dining in France is due to re-open from 9 July in the latest easing of lockdown restrictions. Increased foodservice and lower production in recent months could see a lift in import demand. "The effect of this on UK exports however will depend on how domestic prices perform in the coming weeks. This will be a key watch point in determining how competitive our exports will be going forwards," Mrs Magee added.
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